The liquid value of your portfolio is probably a lot lower than you think

Liquid domain value

I had an interesting conversation last week with another domain investor about what your portfolio would be worth if you needed to sell it right away. No surprisingly, you’re going to get a lot less per-domain when you sell in bulk than if you were to wait for the right buyer and sell individually.

While you might think you have a multi-million dollar portfolio, try to sell it all at once and you may be in for a rude awakening.

Now as for what the liquid value of your portfolio might be, that’s certainly up for debate. In general, with a strong portfolio full of .COM domains the going per-domain value is often in the $100 – $500 according to the person I spoke with. This means if you have an 1,000 name portfolio with a lot of solid .COMs you can expect to get maybe $250k for it if all goes well.

In many cases, a portfolio like this sold over time could net millions of dollars or even get into the $10M+ depending on the quality of the name. However, try to sell it fast, and all at once, and the leverage instantly goes to the buyer.

Now all this being said, I think most domain investors know that the key to making domain names an exceptionally profitable investment is not rushing to sell all your names but instead waiting until buyers come to you. At the same time, people get pretty darn emotional when it comes to their domain names and sometimes with emotion comes a bit of delusion.

So while you might make $1M+ by selling domains for the next 10+ years. What kind of a hit do you think you’d take if you tried to sell them all today? I think it’s a big hit, like take a tenth of a twentieth of what you would have made. What do you think? I want to hear from you, comment and let your voice be heard!

{ 10 comments… add one }

  • bdsmStore.com September 9, 2019, 4:20 pm

    Most 2 letter domain names are worth $100 to $200 if you want to liquid fast.

    Reply
    • bdsmStore.com September 9, 2019, 7:27 pm

      Correction…not 2 letter…
      meant to say 2 word domain names are worth $100 to $200

      Reply
  • Snoopy September 9, 2019, 4:23 pm

    Agree with the sentiment. Pretty much everyones portfolio is worth far less than they think it is, when you bundle names together it simply comes down to how much the portfolio is generating in sales. I disagree though that it is due to liquidity. Most real world small businesses sell on a few years profit, domain portfolios are more passive but still nobody is going to pay 20 years+ profit, or some other figure not even based on profit.

    You can see this play out with Godaddy, they’ll buy big portfolios but they’ll leave the NTLD’s behind, that is because new tlds are likely generating a loss compared to renewals and a portfolio of them has no value.

    However the idea that a 250k portfolio may generate millions or tens of millions is far fetched unless you feel like waiting 300 years.

    Reply
  • Ravi September 9, 2019, 10:39 pm

    Hi…

    Morgan, I think you are absolutely correct when you said “The liquid value of your portfolio is lower than you think” Yes it definitely true….because we expect far more than what others think..

    Of course it changes according to names…and also our expectations change as the time passes.

    But I see you are being very very generous in estimating liquid value of a 1000 name portfolio and what could be a sold price if waited for some time..

    I think this scenario is more applicable to very very few members who have generic one word names…hundreds of them. apart from that it is very difficult to see that returns for many majority domainers.

    just read the latest “liquid domains overview for Q2 of 2019” report by GGRG.com
    they dedicated a new site with easy to access format of all reports…check here.. https://lxdo.com/

    I think this is a standard for calling something liquid value…they are proving with many reported data points.

    for other names it is definitely difficult to appraise / estimate a value (and very difficult for liquid value) we only saw very few portfolio acquisitions…and the price is usually related to the quantity of the portfolio rather than quality.

    These are my thoughts..

    Ravi.

    Reply
    • Snoopy September 9, 2019, 10:44 pm

      “and the price is usually related to the quantity of the portfolio rather than quality.”

      ////////////////////////////////////

      That is definitely not the case. Commentators have just calculated the “average price paid”, that doesn’t mean the buyer just wanted any large portfolio, buys want sales and that is a function of the quality go names.

      Most portfolios would never get interest at an average of $100-$500 per name, the average may not even be reg fee.

      Reply
  • Bob Parry September 10, 2019, 2:05 am

    It’s indeed quite true about these lower liquid values for early or quick sales. That’s why I have now started using my own Potential Resale Values, rather than usual appraisal values along with my much lower or competitive selling prices for my .COM domains via Twitter (twitter.com/DomainsFeast).

    Reply
  • Samit September 11, 2019, 10:12 am

    The price per domain is a function of the quality of the names and the size of the portfolio.

    In fact the price per domain of a 1000 domain portfolio will probably be significantly higher than a portfolio w/ 10,000 domains purely because people tend to improve the names they hold over time.

    And the larger the portfolio, the more the propensity for low quality ‘filler’ names, so 50k names would have a higher percentage of worthless domains than say a 300k portfolio.

    Reply
    • Samit September 11, 2019, 10:13 am

      *I meant to say a 300k portfolio would have more worthless domains than a 50k portfolio

      Reply
  • Samit September 11, 2019, 10:15 am

    **so 50k names would have a higher percentage of worthless domains than say a 3k portfolio.

    Reply
  • Ivo September 20, 2019, 7:18 am

    Let’s look at it from the portfolio buyer perspective.

    Assume you buy the 1000 domains for $250k, that is $250 per name.
    Let’s aim for an average sales price with a factor 10 so average sales price is $2.500.
    Let’s assume a yearly sales percentage of 1% that makes 10 sales which makes $25.000 revenue.
    The registration costs would be $9 per domain so $9.000 total.
    That makes up for a gross profit of $16.000 which is a ROI of 6,4%.
    We have not taken in account the hours spend on answering inquiries and managing sales.

    Is 6,4% a fair ROI for the risk you take in investing domains?
    Would a portfolio buyer want to wait 15+ years to get it’s money back?

    Reply

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